ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, December 3, 2015

Call for Proposals and Registration Information

From our friends at Emory Law School:

Emory’s Center for Transactional Law and Practice is delighted to announce its fifth biennial conference on the teaching of transactional law and skills. The conference, entitled “Method in the Madness: The Art and Science of Teaching Transactional Law and Skills,” will be held at Emory Law, beginning at 1:00 p.m. on Friday, June 10th and ending at 3:45 p.m. on Saturday, June 11th.

 CALL FOR PROPOSALS

We are accepting proposals immediately, but in no event later than 5 p.m. on Monday, February 15, 2016. We welcome proposals on any subject of interest to current or potential teachers of transactional law and skills, focusing particularly on our overarching theme: “Method in the Madness: The Art and Science of Teaching Transactional Law and Skills.”

 

 
 

We hope to receive proposals about teaching: business/corporate law; contract drafting and other transactional drafting; deal skills (interviewing a client, conducting due diligence, negotiating, etc.); business and financial literacy; and ethics and professionalism.

We also welcome proposals about the interplay between teaching transactional law and skills and the ABA’s new experiential learning requirement (Standard 303(a)(3)). Moreover, with regard to the teaching of transactional law and skills, we would like to hear about your efforts to use technology in the classroom, create meaningful assessment tools, and conduct empirical studies. Please submit the proposal form electronically via the Emory Law website at http://bit.ly/trans-proposals before 5 p.m. on Monday, February 15, 2016.

Each session will be approximately 80 minutes long. We invite you to present your topic individually or with a panel of other participants and we encourage you to make your presentation creative and interactive. We look forward to receiving your proposals so that we can finalize the Program.

As in prior years, some of the conference proceedings as well as the materials distributed by speakers will be published in Transactions:  The Tennessee Journal of Business Law, a publication of the Clayton Center for Entrepreneurial Law of The University of Tennessee.

 

CONFERENCE REGISTRATION

 

Both attendees and presenters must register for the Conference and pay the registration fee of $189.00. The registration fee includes a pre-Conference lunch beginning at 11:30 a.m., snacks, and a reception on June 10, and breakfast, lunch, and snacks on June 11. We are planning an optional dinner for attendees and presenters on Friday evening, June 10, at an additional cost of $45 per person.

Registration is now open for the Conference and the optional Friday night dinner at our Emory Law website at http://bit.ly/trans-registration.

TRAVEL ARRANGEMENTS AND HOTEL ACCOMMODATIONS

Attendees and presenters are responsible for their own travel arrangements and hotel accommodations.  Special hotel rates for conference participants are available at the Emory Conference Center Hotel, less than one mile from the conference site at Emory Law. Subject to availability, rates are $129 per night. Free shuttle transportation will be provided between the Emory Conference Center Hotel and Emory Law.

To make a reservation at the special conference rate, call the Emory Conference Center Hotel at 800.933.6679 and mention “The Emory Law Transactional Conference.” Note: The hotel’s special conference rate expires at the end of the day on Wednesday, May 18, 2016.

If you encounter any technical difficulties in submitting your proposal or in registering online, please contact Kelli Pittman, Conference Coordinator, at kelli.pittman@emory.edu or 404.727.3382.

We look forward to seeing you in June!

Sue Payne                                                                        Katherine Koops

Executive Director                                                            Assistant Director

December 3, 2015 | Permalink

Restatement (Third) of Presumptively Unread Contracts

This post from yesterday linked to a funny video where several people unwittingly agreed to some onerous "terms and conditions" in exchange for a chance to win a free iPad and, befitting a "pranked" setup, the people looked a bit foolish in the process.

But they really weren't foolish. While the surface joke is "ha, ha, look what you get for not reading the contract," the signing parties were behaving perfectly rationally. When faced with an adhesion contract in a sidewalk-passer-by setting, no one has an opportunity to read much of anything, and the terms aren't negotiable, anyway. Some 99% of us (or more) scrolled through the last End User License Agreement we saw and hurriedly checked the box labeled, "I have read and understood the foregoing terms," when we had in fact done nothing of the sort.

The moral of the story--now that we have killed the joke by dissecting it--is that Margaret Jane Radin, our co-blogger Nancy S. Kim, and others have gotten something fundamentally correct: clickwrap and other adhesion contracts really are different, and evaluating them under one-size-fits-all contract doctrine makes little sense.  Perhaps the time has come for a Restatement (Third) of Presumptively Unread Contracts.

December 3, 2015 in Commentary, E-commerce, Web/Tech | Permalink | Comments (7)

How Much Disability Insurance Is Too Much? Well, That's a Highly Fact-Specific Question

I feel like one of the lessons of my Contracts class (aside from, you know, all the contract law stuff) is that disability insurance is the type of insurance policy most likely to end up in a published opinion in a casebook someday. Proving my point is a new opinion out of the 8th Circuit, The Northwestern Mutual Life Insurance Company v. Weiher, No. 14-3098.

In this case, Weiher, a dentist, applied for a disability policy from Northwestern in which he "specifically agreed" that he would cancel his previously existing disability policy from Great-West. As you could probably predict from the fact that this ended up in litigation, Weiher never canceled the Great-West policy. When he became disabled to the point that he could no longer practice dentistry, he submitted claims to both Northwestern and Great-West. When Northwestern found out that Weiher had never terminated his Great-West policy, it rescinded its policy, claiming that it would never have issued the policy had it known that Weiher wasn't going to cancel the Great-West policy. So Northwestern sued claiming that Weiher's promise to cancel the Great-West policy was a misrepresentation on Weiher's part that entitled Northwestern to rescind the policy. Weiher counter-claimed. The District of Minnesota granted Northwestern summary judgment because Weiher's failure to fulfill his promise to cancel the Great-West policy exposed Northwestern to greater risk and allowed Northwestern to rescind the contract. Weiher appealed. 

Weiher wins his appeal, not because his vow to cancel the Great-West policy wasn't a promise (the 8th Circuit finds that it was) and not because he didn't fail to fulfill that promise (the 8th Circuit agrees that he didn't), but because Northwestern failed to show that Weiher's failure to fulfill his promise increased Northwestern's risk. Under the relevant Wisconsin statute, the court found, Northwestern's ability to rescind the policy had to turn on specific increased risk in connection with Weiher's particular policy, not just generalized increased risk. All of Northwestern's evidence stated that Northwestern's custom was not to provide disability insurance to people who already had existing disability insurance policies because the risk of over-insurance would encourage fraudulent claims. However, Northwestern had no evidence that insuring Weiher here resulted in over-insurance to Weiher. There was simply no indication that the level of insurance Weiher was carrying between the two policies was too much. Northwestern's testimony on the subject admitted that it didn't know the specifics of Weiher's situation and could only talk in generalities. Therefore, the 8th Circuit concluded that Northwestern couldn't be entitled to summary judgment because it hadn't met its burden with regard to Weiher's specific policy. The 8th Circuit further noted that there was a factual dispute over whether Weiher's representation to cancel the Great-West policy was made with the intent to deceive Northwestern or if, as Weiher contended, he had intended to cancel the Great-West policy and had just forgotten. 

If you feel bad for Northwestern here, there's a dissent on your side: According to Judge Loken, Weiher's promise to cancel the Great-West policy was a condition precedent to Northwestern's policy kicking in, based upon widely accepted underwriting standards that warned against over-insurance. Wisconsin precedent, Judge Loken said, indicated that conditions precedent to insurance coverage should be respected if clearly stated. Based on that, the dissent would have found that Northwestern's policy was not effective until the condition precedent of cancellation of the Great-West policy had occurred (which it never did). 

December 3, 2015 in Legislation, Recent Cases, True Contracts | Permalink

Farewell Post V: The Shark's Farewell (Move or Die)

Shark
Shark that stopped moving . . .

As editor of this blog, I would often tell contributors that a blog is a shark: it has to move or it dies.  That's why it is important to post often.  But it's also why it is good for us to change the guard from time to time.  After a while, one's posts tend to re-tread familiar ground, and it is time for me to get out of the way and let new voices come forward.

I am happy to see that some new contributing editors are already posting on the blog.  I wish them and the continuing editors happy blogging.  But their arrival suggests it is time for me to sign off.

I am moving to new hunting grounds.  Readers interested in my post-blog scholarship (deemed "interesting and recommended" by the Legal Theory Blog) can have a look at SSRN, where my newest piece just appeared.  Here's the abstract:

Originalism in constitutional interpretation continues to grow in its reach, its sophistication, its practical applicability and its popular support.  Although originalism first developed in the 1960s as a doctrine of judicial modesty, originalist judges are now far more confident in their ability to discern the Constitution’s original meaning and thus are willing to strike down legislative enactments inconsistent with that meaning.  Two aphorisms by the leading practitioners of originalism sum up originalism’s journey.  Justice Scalia, writing in the 1980s, conceded that originalism was merely “the lesser evil” and consoled himself with the Chestertonian dictum that “a thing worth doing is worth doing badly.”  Justice Thomas places fewer limitations on his own belief in originalist method and adopts as his motto “any job worth doing is worth doing right.”  The challenge for contemporary originalism is that it is not the sort of thing that G.K. Chesterton thought was worth doing badly, but it also may be the sort of thing that is very difficult to do right.

 

Anyone interested in my full farewells can find links to the other posts in this series below.  Thanks once again to Frank Snyder for inviting me to join this blog, to Paul Caron for creating the blog network of which this blog is a part, and to my fellow bloggers, past and present.  I have made a number of connections through this blog, and I hope that they will continue, as I continue to be interested in the subjects I have helped the blog cover over the past decade.

Farewell Post IV: Students and Tipping Points

Farewell Post III: Misplaced Anger

Farewell Post II: Still Crazy About Blogging after All These Years

Farewell Post I: Why Junior Faculty Members Should Blog

December 3, 2015 in About this Blog, Commentary | Permalink | Comments (2)

Wednesday, December 2, 2015

Terms and Conditions May Apply

Do you need a three-minute break with some adhesion-contract humor? Want to restore your faith that there is some utility to the unconscionability doctrine? Watch the video linked at the end of the excerpt below from Elite Daily.  Here is their lead-in:

How many times have you checked off “agree to terms and conditions” without reading said terms? The better question may be, have you ever read any terms and conditions before signing?

Many times, you’re signing away any right to the content you share, including photos and videos, while allowing big companies to make huge profits off your work. Often, you’re signing away your private data, addresses, friend’s information or more. You’re also usually signing away your right to ever take legal action against the company.

YouTuber Jena Kingsley wanted to prove just how quickly we will all sign away our information for the chance at gaining something for free. But, as the saying goes, you never get something for nothing.

Check out just how fast people will sign up to win a free iPad and the hilarious consequences that follow, in this video.

H/T: Miriam Cherry (St. Louis University)

December 2, 2015 in Film Clips, Miscellaneous | Permalink | Comments (1)

KCON XI: Remember the Alam... er, the Deadline!


San Antonio Riverwalk KCON2016This blog's favorite conference is coming to St. Mary's University School of Law in beautiful San Antonio! The Eleventh International Conference on Contracts (KCON XI) should be on your calendars for February 26-27, 2016 (and if it isn't, put it there). The purpose of this post, however, is to highlight a more pressing date: Friday, December 11 (just over a week away) is the deadline for submitting proposed papers and panels.

Here, courtesy of Professor Colin Marks, the conference organizer, is the KCON call for papers:

Submissions are cordially invited for the 11th Annual International Conference on Contracts, the largest annual scholarly and educational conference devoted to Contracts and related areas of commercial law. Papers and works in progress are welcome from those who study contracts from any perspective, whether doctrinal, pedagogical, theoretical, empirical, historical, economic, critical, comparative or interdisciplinary.

Works that take an international or civil law approach are also welcome. Junior scholars are particularly encouraged to participate. Those interested in proposing and organizing panels of three to five presenters on specific themes are especially encouraged to do so.

Individual submissions should be made by a brief abstract (one page is sufficient) of the paper or work in progress that includes contact information for the author(s). Individual submissions will be placed on panels with like submissions. Panel proposals should include the name and contact information of the moderator or organizer, and a summary of the proposed papers or works in progress. There is no publication commitment for the conference, but organizers of individual panels are free to arrange for publication on their own.

You can find conference information, the e-mail address for proposals, and registration instructions here: bit.ly/KCON2016.

December 2, 2015 in Conferences | Permalink

Joining the Team: Stacey Lantagne (Ole Miss)

Greetings! I am very excited to be joining the fantastic ContractsProf Blog team, and I am especially grateful to Myanna Dellinger for providing the opportunity. I can't wait to get started digging into contract law issues here.  

I am an Assistant Professor at the University of Mississippi School of Law, and my specialty is actually intellectual property, with a focus on copyright and trademark. In addition to dealing with IP and entertainment law contracts in my classes, I also teach first-year Contracts.

I've devoted a lot of my scholarly energy to the IP implications of fandom (if you want to talk to me about fanfiction, my inbox is always open!) and am more broadly interested in the ways in which legal regimes get practically interpreted by laypeople in everyday life. Of course, in our contract-heavy lives in which every website we visit assumes we've read their terms and conditions, inexpert understandings (and misunderstandings) of contract law arise all the time (my favorite is the citation to the UCC to protect the privacy of Facebook statuses that circulates every once in a while). I am really looking forward to blogging about these and other contract law issues and exploring contract law with all of you and the rest of the awesome contributors!

December 2, 2015 in About this Blog, Contract Profs | Permalink | Comments (0)

Contract Forms as Computer Viruses

A pithy piece over at  the Lawyerist makes the point that while lawyers tend to be well-educated and academically accomplished, those facts do not make them inherently good writers. One particularly unhelpful contribution to the problem by legal education is the fact that "law students spend their days reading legal writing that is often verbose, stilted, and chock full of legalese." While I suspect that statement was most directed toward classic-but-musty cases like Hadley v. Baxendale and Hawkins v. McGee, it got me thinking about the reading and drafting of contracts.

Whenever I teach a contract drafting course, proper use and evaluation of existing form provisions is a recurring theme. Clients will not want to pay for reinventing the wheel, and form documents help prevent needless reinvention. Indeed, drafting everything from scratch will tend to turn much transactional work into a sunk cost, the complete antithesis of the value-adding service lawyers need to provide in this automation age. At the same time, the murky and verbose language of so many forms has its own transactional cost: more lawyer and client time is required for every instance of deciphering poorly-drafted language. Unsurprisingly, many students will resolve this tension in favor of copying legalese instead of clarifying it. Pressures of real-life contract drafting are likely to reinforce this tendency in law practice.

Poor contract forms are much like computer viruses--once they are in the system, they will replicate themselves when given the opportunity. Only a lawyer who understands the deal underlying a contract and who has developed the judgment to discern between what to fix and what to keep can prevent the virus from spreading, but even then only once. The form is still out there.

One of the challenges of teaching contracts and commercial law in today's tight legal marketplace is guiding our students toward having understanding and judgment capable (among other things) of stopping contract viruses. Some think that building such transactional cognition is beyond the capacity of law schools, but for our students' sake, I disagree. The lawyers who will avoid being automated out of existence are the ones capable of making sound and complex judgment calls.

December 2, 2015 in Law Schools, Teaching | Permalink | Comments (2)

New in Print

Pile of BooksKenneth Ayotte & Henry Hansmann, A Nexus of Contracts Theory of Legal Entities, 42 Int'l Rev. L. & Econ. 1 (2015)

Aditi Bagchi, Other People's Contracts, 32 Yale J. on Reg. 211 (2015)

Kenneth K. Ching, What We Consent to When We Consent to Form Contracts: Market Price, 84 UMKC L. Rev. 1 (2015)

Dr. Heba Hazzaa & Silke Noa Kumpf, Egypt's Ban on Public Interest Litigation in Government Contracts: A Case Study of "Judicial Chill", 51 Stan. J. Int'l L. 147 (2015)

Gregory H. Shill, Boilerplate Shock: Sovereign Debt Contracts as Incubators of Systemic Risk, 89 Tul. L. Rev. 751 (2015)

December 2, 2015 in Recent Scholarship | Permalink

GLOBAL K: In memoriam – Louis F. Del Duca

I have been looking forward to the resumption of my posts on ContractsProf blog, but sometimes events overtake us. It is with the greatest regret that I report that our colleague Louis F. Del Duca, Professor Emeritus at Penn State Law, died suddenly on 30 November 2015. An announcement from his law school is available here.

Lou was one of my co-authors on Global Issues in Contract Law (“GICL”), and a beloved friend and colleague for all of us. He was the longest-serving faculty member in the history of Penn State – Dickinson Law, and an internationally recognized scholar in commercial and comparative law. His influence in the “internationalization” of American legal education was profound. His inspiration on the development of West Academic’s Global Issues series was palpable.

At the time of his passing, Lou, I and our coauthors were finishing up the preparation of the GICL second edition. We all feel fortunate to have had this one last interaction with Lou, and I look on GICL second as a small remembrance of our friend and colleague. Godspeed Lou!

GICL

 


Michael P. Malloy

December 2, 2015 in Books, Contract Profs | Permalink

Tuesday, December 1, 2015

The (Il-)Legality of Workplace Bullying and Discrimination

In cases where workers have quit their jobs because of intolerable workplace bullying and thus wish to assert illegal discrimination, the United States Supreme Court seems inclined to start the statute of limitations “clock” when the employee resigns rather than when the last discriminatory action takes place. Private sector workers typically have 180 days to report job discrimination to the Equal Employment Opportunity Commission (“EEOC”) whereas public sector employees must do so within 45 days.

The case is Green v. Brennan, No. 14-613.  In it, a postal worker claims that he was passed over for a promotion because he is black. When he complained to his employer, the United States Postal Service, he was allegedly forced to choose between retirement or a lower-paying job 300 miles away. He resigned and filed suit for constructive discharge, but missed the EEOC deadline. The trial and appellate courts disagreed as to when the statute of limitations should start to run, which would have made a difference in the case.

As the law currently stands, employees only enjoy legal protection against discrimination based on a relatively narrow range of underlying issues such as age, gender, national origin, race, religion or disability under, most relevantly, Title VII of the Civil Rights Act of 1964. But luckily, times are changing. Although employees in this country enjoy notoriously few of the rights and work norms that are taken for granted in so many other parts of the industrialized world, some states are doing something to change this situation, at long last. In California, for example, AB 2053 now requires California employers with 50 or more employees to include training in the prevention of “abusive conduct” to already existing requirements regarding sexual harassment. 

“Abusive conduct” is that which a “reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests.” “It may include repeated infliction of verbal abuse … that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance.” The conduct must be undertaken with malice. In other words, AB 2053 targets a wide range of workplace bullying that is not linked to “traditional” discrimination. Such conduct is surprisingly common and accepted by management to a surprisingly great extent in more places than you might think and in places that may or may not surprise you, including our very own field, legal academia.

Unfortunately, AB 2053 does not yet have sufficient legal “teeth” as defining “malice” and the bullying targeted by the law is difficult. Thus, in spite of the extent of the problem and its many recognized and severe consequences on both employers’ productivity and success levels as well as, of course, the employees’ varied interests, if an employee thinks she or he has an issue with his or her employer, the “resolution is likely [to come from] human resources, and not the courts.” 

What happens if a human resources department is disinterested in or for other reasons - corporate acceptance of workplace bullying, perhaps - unwilling to assist the employee? Perhaps not much, as the situation stands. But just as the Civil Rights movement started some place and built up at least some protections against some types of discrimination, modern notions of what constitutes workplace discrimination and its negative effects are, luckily, spreading. In spite of the usual initial criticism, AB2053 is a very good start. Undoubtedly, the common law will be able to shed further light on what modernly constitutes acceptable workplace behavior and what does not. That way, the law can get the required legal “teeth.” In the meantime, it is a sad observation about the modern American workplace that so many managers effectively tolerate or even undertake workplace harassment and that so few counterbalancing institutions in place in other cultures exist here, for instance trade unions. In contracts law, it’s all about the bargaining power. Most American workers have too little in today’s workplace.

December 1, 2015 in Commentary, Current Affairs, Labor Contracts, Legislation | Permalink | Comments (0)

Joining the Team: Mark Edwin Burge (Texas A&M)

Changes are underway at the ContractsProf Blog, and I am delighted to be one of them.  Thanks to Myanna Dellinger for giving me the opportunity to join a team building on over a decade of quality content established by our founder (and my faculty colleague) Frank Snyder, outgoing editor Jeremy Telman, and many others throughout the years.

Who is this guy, anyway? Glad you asked. I am an Associate Professor of Law at Texas A&M University School of Law in Fort Worth, proud home for two years of the esteemed International Conference of Contracts that, as Jeremy mentioned here, has been closely associated with this blog since its inception. My major scholarly interests are in contracts (seriously, did you think I would NOT say "contracts" here?), commercial law (especially payment systems), and the interaction of both fields with legal skills and practice. I came to the academy after eight years of practice in the areas of business and commercial litigation and related transactions. Despite some occasional flirtations with theory, I have yet to shake off my greater interest in how lawyers actually make things work. So I've learned to live with that, and I'm most fortunate to be at a law school with colleagues and an administration who support the grab-bag of things I do.

My current work, which I hope to discuss here occasionally (while skillfully avoiding off-putting narcissism in the process), involves the intersection of private contract law with public regulation in the rapidly developing area of emerging payment systems. Where exactly are the best dividing lines between private and public law, especially in an age where the lag between technology and law seriously strains the institutional capacity of legal systems? Perhaps we can find some answers to that overarching question and have some fun along the way. I should, in the interest of full disclosure, confess that I think contract law is fun.

I look forward to the adventure, and I appreciate anyone who is along for the ride.

 

December 1, 2015 in About this Blog, Commentary, Conferences, Contract Profs, E-commerce | Permalink | Comments (0)

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

Rank Downloads Paper Title
1 695 An Overview of Privacy Law
Daniel J. Solove and Paul M. Schwartz
George Washington University Law School and University of California, Berkeley - School of Law 
2 178 Defective Arbitration Clauses: An Overview
Badrinath Srinivasan
Independent 
3 138 Contract Law: A Comparative Introduction, Chapter 1
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) 
4 137 Legal Transplants in the Law of the Deal: M&A Agreements in India
Afra Afsharipour
University of California, Davis - School of Law 
5 131 Presumed Undue Influence: The False Partition from Fiduciary Accountability
Robert Flannigan
University of Saskatchewan 
6 112 Contract Theory and EU Contract Law
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL) 
7 111 The Challenges of Private Law
Hanoch Dagan
Tel Aviv University - Buchmann Faculty of Law 
8 78 The Relational Economics of Commercial Contract
Chapin Cimino
Drexel University Thomas R. Kline School of Law 
9 70 Towards a European Insurance Contract Law? The Commission Expert Group, its Antecedents and Consequences
Jürgen Basedow
Max Planck Institute for Comparative and International Private Law 
10 70 The State of the Law of Unjust Enrichment in Common Law Canada
Lionel Smith
McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law

SSRN Top Downloads For LSN: Contracts (Topic) 
RECENT TOP PAPERS 

Rank Downloads Paper Title
1 178 Defective Arbitration Clauses: An Overview
Badrinath Srinivasan
Independent 
2 167 The Continuing Evolution of U.S. Judgments Recognition Law
Ronald A. Brand
University of Pittsburgh - School of Law 
3 138 Contract Law: A Comparative Introduction, Chapter 1
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) 
4 112 Contract Theory and EU Contract Law
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL) 
5 111 The Challenges of Private Law
Hanoch Dagan
Tel Aviv University - Buchmann Faculty of Law 
6 81 Stephen A Smith on Duties and Liabilities
Nicholas McBride
University of Cambridge - Faculty of Law 
7 78 The Relational Economics of Commercial Contract
Chapin Cimino
Drexel University Thomas R. Kline School of Law 
8 70 The State of the Law of Unjust Enrichment in Common Law Canada
Lionel Smith
McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law 
9 64 Between Regulatory and Autonomy-Based Private Law
Hanoch Dagan
Tel Aviv University - Buchmann Faculty of Law 
10 61 Dodging Windfalls: Damages Based on Market Price, Actual Loss, and Appropriate Awards
John Y. Gotanda
Villanova University School of Law

 

 

 

December 1, 2015 in Recent Scholarship | Permalink

Monday, November 30, 2015

Farewell Post IV: Students and Tipping Points

OutliersI've been re-reading Malcolm Gladwell.  The sub-title of The Tipping Point is How Little Things Can Make a Big Difference.  That same idea is at the heart of some of his other works.  In Outliers, he reports on the importance of birth dates in Canadian hockey.  Boys who have birthdays in January and February tend to be hockey stand-outs, Gladwell argues, because in their early years when they are under ten years old, they are significantly older and more physically mature than the boys born towards the end of the calendar year.  As a result, the January and February kids get picked for all the travel teams and then all the all-star teams.  They get more practice in, they get the coaches' attention, and they also get to play in more challenging situations.  With each new experience, they improve incrementally, but eventually the differences between the January and February kids and the November and December kids are vast.*

I've been thinking about how students at unranked law schools like mine are like Gladwell's Canadian hockey players born in November and December.  But in the case of law students, the differences between the students who score 170 on the LSAT and those who score 145 on the LSAT are not as arbitrary as the Gregorian calendar.  They are often socio-economically determined. Obviously, this does not apply to all students who score below 150 on the LSAT; I am generalizing.  

But I am thinking of students from economically stressed families.  Their parents work all the time and/or their parents are divorced, adding additional economic stress and uncertainty to the family environment.  The parents may not have been to college or they may have gone but not pursued a serious course of study.  In any case, higher education takes a back seat in many families to more immediate concerns: children over 18 (or over 16) have to work.  Children have to look out for their siblings while the parents take care of other responsibilities.

Many of my students worked their way through college.  Many took five or six years to graduate because they needed to work or because they had to interrupt their studies for various reasons.  They ran out of money, they needed to care for a sick parent or grandparent, or they weren't performing well in college for reasons ranging from homesickness to immaturity to undiagnosed medical conditions exacerbated by the stress of a strange environment.  They went to small, struggling colleges or to branch campuses of state universities.  Their instructors tried diligently to help them, but they were in need of remedial courses, and they were in environments that did not encourage concentration on the development of the sorts of critical reasoning skills that comprise the basic building blocks of legal education.  Their undergraduate teachers were satisfied if they followed directions, committed instructional materials to memory and then re-created thought processes that were covered in class or in readings.

By the time these students arrive at law school, they seem less intelligent, less dedicated, less disciplined, less professional and less mature than students at higher ranked schools.  Standardized tests tells us this is the case.  They are none of those things.  They are bright, ambitious people who were born in December.  They never got the training that the students born in January got.  They never were asked to compete on the same level.  They never got the same encouragement.  They sat out entire seasons due to outside pressures that prevented them from focusing on their own careers.  

And now they arrive at law school, and nothing as changed.  The vast majority of students just go to the "best" law school that accepts them (or the best law school that accepts them and offers them money).  Geography may play some role, but US News rankings determine the outcome of regional contests.  A law school may tout its experiential learning programs or its program in entrepreneurship, but it will attract students in a rather narrow band of LSAT scores and undergraduate GPAs.  Students with strong LSATs and UGPAS go to the highly-ranked schools.  Students with the weakest LSATs and UGPAs go to unranked schools, where their peers are other students like them who have never had the opportunity to develop the study skills, the discipline, the critical thinking skills, the maturity and the professionalism that are the hallmarks of the successful pre-professional.

In addition, they are still subject to the same outside pressures that prevented them from getting the most out of their college educational experiences.  I once had a student miss a contracts class because she had to pick up her father at the airport.  Her family did not think it was a big deal for her to miss class.  No matter how many times we tell them that being a law student is a full-time job, the message does not sink in for students from families who think of school as a part-time endeavor supplemented with a "real job."  Many of my students work 20 hours a week, and they resent the fact that we have opted to keep the 20-hour rule when the ABA has abandoned it.  They would work more if they could.  When I confronted my students in a bar prep course on contracts last year with evidence showing that almost none of our graduates who worked while studying for the bar passed the bar exam, they responded with outraged exclamations: "Well, I've gotta eat!"

Ray Bourque
Ray Bourque, Hall of Fame Class of 2004. 
Born December 28, 1960

All of this (and more) suggests to me that we might be facing a tipping point phenomenon at law schools with median LSATs below 150.  This is not about failing law schools or about failing law students.  It is about small differences adding up incrementally to a sudden plummet in bar passage rates.  If I'm right, I don't think the solution is anything that law schools can undertake on their own.   Malcolm Gladwell's conclusion is that Canada is missing out on a lot of hockey talent by benching players born after July.  I think the legal profession (and thus society) will miss out on a lot of untapped legal talent if we don't continue to find a way to train the students who have the drive, the grit and the commitment, but not the preparation, for law school.  As I indicated in the previous post in the series, I don't think the legal profession or our society as a whole benefits from excluding the students whose pre-law-school predictors suggest that they will struggle to pass the bar examination the first time they take it.  After all, while January and February produce more NHL hockey players than any other month, on average, according to Quanthockey.com, they are not the best.  The January players score an average of 105.4 points over their NHL careers.  October payers score an average of 128.3, and December players best them all at 138.8!

*Gladwell might be wrong about Canadian hockey players. He has his critics but also his supporters.

November 30, 2015 in Commentary, Teaching | Permalink | Comments (4)

Sunday, November 29, 2015

Exciting Changes to Your ContractsProf Blog Team

As you perhaps know, Jeremy Telman wishes to stop blogging for the ContractsProf Blog after around a decade of doing so. He is posting a small series of farewell posts these days, but will not blog anymore after the end of the semester. We wish him very well in his diverse future professional efforts.

I have promised to take over as the lead editor of the ContractsProf Blog. I have big shoes to fill after Jeremy’s departure, but will try my very best to post as many timely, thought-provoking and, hopefully, quirky posts as possible. As you may have noticed, I tend to like to focus on issues that relate to consumer problems, environmental matters, and the new economy. I also plan to incorporate a global angle when I come across relevant material.

Additionally, I am building up and continuing a great team of co-bloggers. First, Nancy Kim, Jeffrey Harrison and Michael Malloy will continue blogging when they can. I am also welcoming new bloggers Stacey Lantagne and Mark Burge. Over the next few days, they will introduce themselves directly online.

Happy end of the semester!

November 29, 2015 in About this Blog | Permalink

Wednesday, November 25, 2015

New in Print

Pile of BooksMichael S. Barr, Mandatory Arbitration in Consumer Finance and Investor Contracts, 11 N.Y.U. J. L. & Bus. 793 (2015)

Richard A. Epstein, The Upside-Down Law of Property and Contract: Of Fannie Mae, Freddie Mac, and San Jose Pensions, 93 Neb. L. Rev. 869 (2015)

Matthew D. McGill & Alexander N. Harris, NML Capital v. Argentina: Enforcing Contracts in the Shadow of the Foreign Sovereign Immunities Act, 30 Md. J. Int'l L. 3 (2015)

George A. Nation III, Demand Promissory Notes and Commercial Loans: Balancing Freedom of Contract & Good Faith, 94 Neb. L. Rev. 151 (2015)

Bradford Stone, Contracts for the International Sale of Goods: The Convention and the Code, 23 Mich. St. Int'l. L. Rev. 753 (2015)

Mark Strasser, Traditional Surrogacy Contracts, Partial Enforcement, and the Challenge for Family Law, 19 J. Health Care L. & Pol'y 85 (2015)

Frank Sullivan, Jr., Banking Business and Contract Law, 48 Ind. L. Rev. 1195 (2015)

Kevin Warbach, Reflections on Network Transactions and Social Contracts for the Broadband World, 13 Colo. Tech. L. J. 45 (2015)

Erich A. Zacks: Contract Review: Cognitive Bias, Moral Hazard, and Situational Pressure, 9 Ohio St. Entrepreneurial Bus. L.J. 379 (2015)

 

November 25, 2015 in Recent Scholarship | Permalink

Tuesday, November 24, 2015

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

Rank Downloads Paper Title
1 663 An Overview of Privacy Law
Daniel J. Solove and Paul M. Schwartz
George Washington University Law School and University of California, Berkeley - School of Law 
2 171 Defective Arbitration Clauses: An Overview
Badrinath Srinivasan
Independent 
3 131 Contract Law: A Comparative Introduction, Chapter 1
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) 
4 125 Presumed Undue Influence: The False Partition from Fiduciary Accountability
Robert Flannigan
University of Saskatchewan 
5 121 Legal Transplants in the Law of the Deal: M&A Agreements in India
Afra Afsharipour
University of California, Davis - School of Law 
6 107 Contract Theory and EU Contract Law
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL) 
7 87 The Challenges of Private Law
Hanoch Dagan
Tel Aviv University - Buchmann Faculty of Law 
8 68 Contract Law and the Digital Single Market: Towards a New EU Online Consumer Sales Law?
Rafał Mańko
European Parliamentary Research Service 
9 66 Towards a European Insurance Contract Law? The Commission Expert Group, its Antecedents and Consequences
Jürgen Basedow
Max Planck Institute for Comparative and International Private Law 
10 64 The State of the Law of Unjust Enrichment in Common Law Canada
Lionel Smith
McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS 

Rank Downloads Paper Title
1 171 Defective Arbitration Clauses: An Overview
Badrinath Srinivasan
Independent 
2 165 The Continuing Evolution of U.S. Judgments Recognition Law
Ronald A. Brand
University of Pittsburgh - School of Law 
3 131 Contract Law: A Comparative Introduction, Chapter 1
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) 
4 107 Contract Theory and EU Contract Law
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL) 
5 87 The Challenges of Private Law
Hanoch Dagan
Tel Aviv University - Buchmann Faculty of Law
Date posted to database: 14 Nov 2015
Last Revised: 14 Nov 2015
6 76 Stephen A Smith on Duties and Liabilities
Nicholas McBride
University of Cambridge - Faculty of Law 
7 64 The State of the Law of Unjust Enrichment in Common Law Canada
Lionel Smith
McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law 
8 58 Supreme Disgorgement
Caprice L. Roberts
Savannah Law School 
9 56 Restoring Freedom of Contract between Doctor and Patient in Medicare Part B
David Bernstein
George Mason University School of Law 
10 52 Dodging Windfalls: Damages Based on Market Price, Actual Loss, and Appropriate Awards
John Y. Gotanda
Villanova University School of Law

 

 

November 24, 2015 in Recent Scholarship | Permalink

Monday, November 23, 2015

Farewell Post III: Misplaced Anger

Rage of AchillesA lot of people are angry at the legal academy.  They are angry about falling bar passage rates and limited career opportunities.  They are angry that law schools do not do enough to prepare them for the bar or for practice and that tuition is too high given what traditional legal education can accomplish.  The anger, to the extent that it comes from law graduates who worked hard and still cannot find satisfying work as attorneys, is understandable.  Directing that anger at law professors is also understandable but in most cases unjustified.  

We did not create the market conditions.  We, for the most part, are not even the architects of the policies that determine admissions standards or tuition.  We are very limited in the extent to which we can innovate because we are subject to ABA educational guidelines that increasingly (and often unhelpfully) micro-manage our operations.  Almost every innovation that would improve legal education would also make legal education more expensive.  

I want to outline two arguments in this post.  First, legal academics and administrators at unranked law schools are people of good will who are trying to continue to serve people who ardently aspire to become attorneys.  Second, the legal profession is also full of people of good will, but collectively the legal profession is behaving as professions always do in times of economic contraction: they are raising barriers to entry so as to protect their incomes and their self-created monopoly in the provision of specialized services.

What is going on at unranked law schools is pretty simple.  For decades, such law schools accepted students who, for the most part, could not have gotten in to more highly-ranked law schools.  For decades, the overwhelming majority of such students went on to pass the bar and enter the legal profession.  As Michael Simkovic and Frank McIntyre have shown, those students are financially better off for having done so, and without the lower-ranked schools, they never would have had the careers they now have.  Unranked law schools started dipping deeper into the applicant pool when that pool shrunk considerably in size, believing that they had the ability to identify students who could succeed in law school and in the legal profession and that they could address the needs of the academically underprepared with beefed-up academic success programs and curricula more geared towards bar preparation.  

Evidence is mounting that law schools were overly sanguine about their ability to help students in the bottom quartile of the national LSAT pool.  But evidence is also beginning to suggest that the pool has bottomed out and begun to grow again.  That should mean that unranked law schools that are competing for students may have a larger pool of students to compete over, and so long as schools learn their lesson and keep growth and costs down, that should mean that they can begin to increase their admissions standards back towards where they were a decade ago.  In five years, the crisis may well have passed and the law schools over which the sword of Damocles currently hangs will be crowing about gaudy bar passage and employment rates.  

This result is far preferable to shutting down existing law schools.  Right now, we have overcapacity, but it law schools disappear, they are unlikely to reappear.  And if, as seems likely, the law schools that close are the unranked law schools, the losses will hit underserved communities the hardest.  I will have more to say about who those communities are and why keeping them out of the legal profession is a big problem in the next post in this series.

The ABA is the guardian of our profession.  What do professions and professional organizations do?  Following Magali Sarfatti Larson, we can conceive of the legal profession as a group of trained experts attempting to establish a monopoly over a market in services.  The key to control over a market for professionals becomes control over the production of producers. By limiting the supply of credentialed practitioners, professionals assure themselves a favorable bargaining position in the market for their knowledge and services. (Magali Sarfatti Larson, The Rise of the Professions: A Sociological Analysis 29-30 (1977)). As Larson points out, professions do not so much meet existing needs as shape or channel the needs of consumers  (id. at 58).  In order for a profession to succeed, it needs to convince the members of society as a whole that its services are necessary and that only people with a certain kind of expertise and credentialing are qualified to provide such services.   

And so, when the going gets tough, barriers to entry rise.  Recent trends of (often steeply) lower bar passage rates and the steady drumbeat calling for greater scrutiny of law schools viewed as underperforming are consistent with how Larson's model predicts professional organizations will respond to economic pressures.  But it also threatens to add a new and ugly chapter to the history of the ABA.

Many have written about the racist bias underlying the establishment of the ABA (e.g., Daria Roithmyer, Deconstructing the Distinction between Bias and Merit, 85 Cal. L. Rev. 1449, 1476 (1997)).   I do not think there is any such intentional bias at work today, but the organizations so eager to mete out death sentences to law schools that serve underrepresented minorities and the academically underprivileged need to think about what the legal profession will look like in 2025 if their wishes all come true.   

November 23, 2015 in About this Blog, Commentary, Teaching | Permalink

Saturday, November 21, 2015

Consent Agreement on Embryo Destruction a Legally Binding Contract

A California Superior Court Judge has ruled that a consent agreement between spouses about what to do with frozen embryos in case of divorce has the effect of a legally binding contract. This was the first such ruling in California. The case is In re the Marriage of Stephen E. Findley and Mimi C. Lee.

Shortly before Dr. Lee and Mr. Findley were married in 2010, Dr. Lee discovered that she had cancer. The couple decided to create and store embryos to preserve their chances of having a child. Shortly after the marriage, the couple signed a consent decree stating that the embryos were to be destroyed if the couple divorced. They marriage went downhill and ended in an acrimonious divorce in 2015.

Dr. Lee, however, argued for her right to keep the embryos. She argued that because of her age – she is 46 – the embryos are her only chance of having a child on her own. She testified that she considered the fertility clinic agreement a mere consent form and that she thought she could change her mind about it later on.

Judge Anne-Christine Massullo found that a consent agreement is a legally binding contract. It must be upheld in order to render certainty to IVF clinics and individuals who undergo IVT treatment regarding their dispositional choices before embryos are created. Said the judge about holding IVT agreements to be mere contracts: “It is a disturbing consequence of modern biological technology that the fate of … embryos … must be determined in a court by reference to cold legal principles.” That may be a valid concern, but equally important is, undoubtedly, the rights and concerns of both marital parties.

Consider this as well: Dr. Lee had offered her ex-husband to waive child support if he would let her use the embryos. However, such a promise is meaningless in California where such an agreement cannot be enforced. In contrast, Mr. Findley testified that Dr. Lee had once asked him “how much money the embryos were worth to him” and indicated that she could turn a possible child against him in the future. The court found “well founded” Mr. Findley’s belief that Lee would use any child born of the embryos as a money extortion device. Said the judge: “Mr. Findley should be free from court compelled fatherhood and the uncertainties it would bring.”

In this case, these included potential extortion by a highly educated woman – an anesthesiologist - who seems able consider her potential children to be not only objects of affection, but also vehicles for a monetary reward. Mr. Findley testified that he would like to have children some day, just not with Dr. Lee. Wise decision, it seems, and one that the court equally wisely supported, even though it had to resort to “cold legal principles.”

11/21/2015

Consent Agreement on Embryo Destruction a Legally Binding Contract

A California Superior Court Judge has ruled that a consent agreement between spouses about what to do with frozen embryos in case of divorce has the effect of a legally binding contract. This was the first such ruling in California. The case is In re the Marriage of Stephen E. Findley and Mimi C. Lee, Case No. FDI-13-780539, http://www.sfsuperiorcourt.org/sites/default/files/pdfs/FINDLEY_Statement_Of_Decision%20Rev_1.pdf

Shortly before Dr. Lee and Mr. Findley were married in 2010, Dr. Lee discovered that she had cancer. The couple decided to create and store embryos to preserve their chances of having a child. Shortly after the marriage, the couple signed a consent decree stating that the embryos were to be destroyed if the couple divorced. They marriage went downhill and ended in an acrimonious divorce in 2015.

Dr. Lee, however, argued for her right to keep the embryos. She argued that because of her age – she is 46 – the embryos are her only chance of having a child on her own. She testified that she considered the fertility clinic agreement a mere consent form and that she thought she could change her mind about it later on.

Judge Anne-Christine Massullo found that a consent agreement is a legally binding contract. It must be upheld in order to render certainty to IVF clinics and individuals who undergo IVT treatment regarding their dispositional choices before embryos are created. Said the judge about holding IVT agreements to be mere contracts: “It is a disturbing consequence of modern biological technology that the fate of … embryos … must be determined in a court by reference to cold legal principles.” That may be a valid concern, but equally important is, undoubtedly, the rights and concerns of both marital parties.

Consider this as well: Dr. Lee had offered her ex-husband to waive child support if he would let her use the embryos. However, such a promise is meaningless in California where such an agreement cannot be enforced. In contrast, Mr. Findley testified that Dr. Lee had once asked him “how much money the embryos were worth to him” and indicated that she could turn a possible child against him in the future. The court found “well founded” Mr. Findley’s belief that Lee would use any child born of the embryos as a money extortion device. Said the judge: “Mr. Findley should be free from court compelled fatherhood and the uncertainties it would bring.”

In this case, these included potential extortion by a highly educated woman – an anesthesiologist - who seems able consider her potential children to be not only objects of affection, but also vehicles for a monetary reward. Mr. Findley testified that he would like to have children some day, just not with Dr. Lee. Wise decision, it seems, and one that the court equally wisely supported, even though it had to resort to “cold legal principles.”

November 21, 2015 in Current Affairs, Science, True Contracts | Permalink | Comments (0)

Friday, November 20, 2015

The High Price of an Unenforceable Agreement to Agree

The law firm of Andrews Kurth was recently hit with a nearly $200million dollar judgment for malpractice.  Yes, that's right - nearly 200 MILLION dollars.  At the bottom of this - an agreement which was deemed unenforceable as an "agreement to agree."  As reported by Law 360 (which requires registration - apologies), the malpractice suit stemmed from representation in a dispute involving a family business, Martin Resource Management.  Two brothers, Scott and Ruben Martin, were fighting over  management issues until their mother stepped in to broker a deal.  Andrews Kurth represented Scott Martin and sought changes to the deal to ensure its enforceability.  Scott ended up suing Ruben to force him to comply with the terms of the settlement; however, the appeals court ruled that the settlement agreement revised by Andrews Kurth was unenforceable as an "agreement to agree."  Many lawsuits ensued resulting in this incredibly large jury award.

Unfortunately, I couldn't get a copy of the actual agreement that was at issue - I would really like to see what the language looked like...

 

November 20, 2015 in Commentary, In the News | Permalink | Comments (0)